Do You Pay Your Insurance and Taxes with Mortgage???

We have it in escrow because it's easier, but it does cost more. Not much more, when we did the math it was under a 100 a year.

Funny that someone said TF was financially blessed because she chooses to save money by paying her tax bill all at once instead of over the year. She blessed herself with good financial planning, maybe?

It is strictly a preference. I cannot fathom paying 3 separate bills - we have enough as it is. The mumbo jumbo about the mortgage company using the money - who friggin' cares - they aren't the only bank using people's money in their day-to-day lives. Inconveniencing myself isn't worth it. But I'm not a control freak that has to micro manage every little detail of my life either :)

It's not an option with my mortgage company, it's a requirement to use their escrow service. I don't really care enough about missed earnings on a few thousand dollars over the year to worry about it.

I don't know what the average is as far as what most people do.

We do not have escrow to take care of our taxes and insurance.

If someone is not good at budgeting and saving the funds needed for taxes and insurance, then I suppose an escrow account would be what is needed because it forces them to have them money due to the escrow controlling the mortgage.

We have never had escrow and won't. Why? We'd rather put OUR money to work for US in OUR account and WE control it. We earn money on OUR money vs the bank earning money on our money.

It is no surprise that our house insurance which is around $3000 a year is due in February. We don't do payments on that either... we get a discount for paying in full.

We are fully aware of our property taxes as well. We get an estimated bill every May for our 2 properties. Property tax in TX is high and we know our bill will be pushing $20,000 which is "due" in January. However, we pay in full before 12/31 and we are able to utilize the benefits when we file our income taxes.

We are numbers people and we find ways for our money to work for us because I'd much rather be getting what little interest is earned in MY account instead of allowing the bank to use my money to their benefit.

If you maintain control, then you can take advantage of any discounts, following up with insurance to make sure you are not overpaying. It is not that much effort and you end up with the advantage of being in control of your money.

ETA: Excuse me..... It has nothing to do with being financially blessed. It has everything to do with planning. You do have to start somewhere and sometimes, you may use escrow and there is nothing wrong with that if it is whatever fits your budget at the time. I personally don't like having a bank using my money for free. I know life can be difficult and I have had my share of s..t as well.

We pay our insurance and taxes separately. We get a small discount for paying our entire property tax bill by a certain date in the year.

Someone was very rude to T.F. below. :( That wasn't nice at all.

I guess we, too, are "incredibly financially blessed." Actually most of us who live in the Unites States are blessed to a certain extent. Some of us are highly focused on living debt free. Debt is what triggers this entire "installment plan" payment system.

I used to be up to my eyeballs in debt and house payments which included escrow for insurance and taxes. When I married my husband he taught me how to stop living that way. Barring some extreme circumstance (and I mean my children are literally starving) I would never go back, even if I had to live out of my car. Our only debt is our house, and we're always trying to pay that off too.

Besides letting the mortgage company use your money (albeit they're not making much on you individually, but imagine collectively), when you pay out of escrow you're less aware of how much of your hard-earned money is going to property taxes. When you're less aware you're less likely to hold your city/county governments accountable for their spending. That works great for them!

We really have to look at this stuff differently if we're ever going to change things for the better. It's time to stop blaming or being envious of other people.

Sorry that I went off on a tangent C.!

JMO.

We pay ours with our mortgage. I've never known any other way.

Never did it until our last mortgage where escrow was required. It is not a matter of being financially blessed, what a silly comment. Our homeowners came out monthly but directly. I saved each month for the real property taxes. What makes the financially blessed silly is they escrow more than the taxes are so you are paying more monthly than you would have to save if you paid them yourself.

I never liked escrow because they aren't paying me interest yet that money is there for them to use. It is like you are lending them a sum of money interest free.

The rate is so low on our mortgage this aspect just wasn't worth the fight.

I would imagine the difference is that if you escrow taxes and insurance, you don't have access to that money at all for the whole year until escrow pays the bills.
Kind of like why I'm not a fan of a large Federal Income Tax refund...I'd rather have the extra income every month instead of using the Federal government as my financial planner.

We also pay ours separately. We've done it both ways with our various mortgages and our current system seems to work best for us.

We sat down and calculated all the bills we pay annually or bi-annually- property taxes, homeowners insurance, car insurance, life insurance, car registration fees, etc. We totaled up the annual cost and divided it by 12. That amount became our "impound payment" and we figured it into our monthly budget.

Every other payday, I transfer the "impound payment" to a separate savings account linked to my checking account. As the bills come up, I transfer the money back to the checking account and pay them in full.

You have to be diligent about making the "impound payment" but so far, the system works well for us.

We pay our insurance and taxes on our own. I use AAA for auto and home and get a discount that way.

Years ago my sister had a problem with her mortgage company (they paid into an escrow account for property taxes) and ended up getting screwed (the lender had been taking money out but didn't pay her property tax and she had to pay it anyway out of pocket -long story). Your property taxes are your responsibility, not the mortgage company's and if something gets goofed up on the part of the lender, you still have to pay your property tax out of your pocket. I'm sure what happened with my sister is rare, but I'd rather be in control of my money.

i suspect most of us have it in with our mortgage payment. but it's perfectly possible to separate them. some people do it for bookkeeping purposes. i prefer the simplicity of getting it all done in one swell foop.
:) khairete
S.

We have always had both taxes and insurance in escrow. We are not good planners.

:(

We have always paid separately. I had no idea there was another choice. We get a (minor) discount on our local taxes if paid in full early and a discount on our insurance if we paid it biannually rather than monthly, so we do.

We pay our taxes and insurance separate from our mortgage payment. The county allows for a discount if you pay property taxes early. Also I pay more attention to our insurance premiums and coverages when I pay the bills. I have called around and gotten competitive bids on homeowners insurance and an umbrella policy and saved money and got better coverage. If it was wrapped into the mortgage payment, I wouldn't pay that much attention to it.

We have always paid with our mortgage via the escrow account. However, we paid that off and the home equity line of credit doesn't allow for escrowing so starting now, we have to pay separately.

I liked paying it together because the mortgage was paid and the other two we covered...no need to have two additional bills or worry about paying them.

We pay insurance and taxes on our own for the reasons that Michelle P. stated.

ETA: Being blessed has absolutely nothing to do with it. We budget.

We pay our own taxes one time per year, I think it's in the spring.

We buy our own insurance through a local company that also covers our cars.

When I was on the Board of Directors for Habitat For Humanity we included the taxes and insurance in their monthly payment. This was to insure their home had insurance in case it was lost. We carried the note on their home and were acting as a bank holding a mortgage.

We rehabbed donated homes, considered new by the assessors, and if something happened the money would pay off the house to us.

I do think that some mortgage companies will automatically do that.

We are paying it ourselves, not out of an escrow account.

I pay the insurance monthly, which is easy in our budget.

If I were smarter, I would figure out a way to save a certain percent of the taxes each month so I would be able to easily pay it when it were due, but.... I haven't been able to put that amount aside each month... so, when taxes are due, I'm very hard pressed to be able to pay it. (Our budget has been extremely tight due to hubby being laid off 6 years ago, and being out of work for 2 1/2 years... he is working now, but it is a much lower paying job than previous.... we are working on less than half of what our income was 6 years ago.)

I'm hoping that some of our budget woes will ease up.... but that hasn't happened yet.

We pay them separately and have just negotiated with our refinance to continue to pay them separately.

For us, the benefits are keeping our current homeowners insurance policy, which includes some riders for my rings, etc. Also, the monthly payment for our taxes is almost twice what we actually pay currently.

I didn't read all the responses, but noticed there were several mentions of this being purely preference, which isn't really accurate. Your mortgage company will have a list of about 6-8 conditions you have to meet before you can request to end your bank escrow account. (loan has to be certain length old, no late payments in certain period, outstanding balance has to be less than 80% of the home value.) If you call they will send you the requirements and can tell you if you meet them or not. I'm not sure if all financial institutions follow this practice, but our last 2 major banks (Chase and Wells Fargo) both has very similar guidelines for escrow.

We just cancelled our escrow account for the same reason a couple other people mentioned. Every year, during our "escrow analysis", we had to increase the "buffer" amount by paying a lump sum or our monthly payment would increase. Our taxes are paid in May and Sept, with our insurance in between. So the account balance dipped below their required threshold during the summer, but the balance was around 3-4K the rest of the year. I just got tired of them holding our money all year and asking for more! I'm pretty careful with bill paying so adding in a couple extra one-timers isn't an issue. That said, most of my friends do keep them together because they like the convenience or aren't eligible to split.

I bought my first home 6 years ago and had no idea there was another way to do it, unless the home was paid for.

We recently bought this house, so the whole horrid process is very fresh in my memory. Our mortgage company actually required that we set up an escrow account for insurance and taxes. (And then they promptly didn't pay the taxes on time, and incurred a penalty, which I then had to fight them to pay... UGH).

Just another thought...when I bought my first house my mother advised me to get "life insurance" on me and my hubby in the value of the mortgage instead of getting mortgage insurance through the bank. That way the value of the insurance did not go down with the value of the mortgage but rather stayed the same. I thought is was a good tip to share!

B.

We never have until this last mortgage as it is required. I HATE paying escrow. One year they underpay, then increase my mortgage a $100, the next they realize I paid them too much, so they decrease it.

I think back fondly to the days where I saved every month to pay for the taxes, it was in my own account earning interest and I knew exactly where it was going. My mortgage payment was always the same without the escrow. If there was a way to get it so I could pay taxes and insurance myself, I would in a heartbeat.

Most mortgage companies don't have this as an option. You pay a little additional which they put into escrow and pay it on your behalf. Since they hold the mortgage it's to their benefit to make sure that taxes and insurance are up to date and paid.

We use the escrow services. Makes our lives much easier.

Ours are separate from the mortgage. I would rather pay the lump sum once or twice a year rather than shell out extra money every single month. It is also less money to pay the insurance as a lump sum than to pay it monthly, at least for our policy. We also have a discount because we get our car and home insurance through AAA.

We always paid our taxes and insurance with our mortgage payment. But now that the mortgage is paid off we have to pay them separately. I hate it! It didn't seem to be hard to budget it when it was automatically paid with the mortgage payment, but now I have to remember to put a certain amount away each month so when the big tax bill and insurance bill is due I have the money to pay them. The worse part is, the money I put away shows up in my account making it look like I have a lot of "extra money" every month, even though I actually don't.

We escrow for convenience...not because we can't budget/manage our money.

I know people who do it separate but we do ours together. It's just so much easier to pay both together. I'm never going to miss a mortgage payment. This way, insurance is going to be paid for sure as well.

Absolutely. I have seen families lose their homes because later down the line they thought they could pay them previously and found it was already spent. I could find myself making that mistake so we always choose to do that.

I do, because it was a condition of obtaining our particular mortgage at our particular bank. From the banking perspective, it protects their investment by making sure that the property is insured and that there isn't a lien placed against it for back taxes.

I know several people that have their own insurance/tax account separate from the mortgage payment. Usually it works out fine, but I know one person got in a pinch because she raided that accounts to pay some other bills, then didn't have enough money for taxes. If you do your own escrow, you have to treat it as untouchable except for the intended purpose.

We choose the insurance company, not the bank. We have our home and auto insurance with the same company, so we get a dual-policy discount. Both policies are paid in full (annual and bi-annual bills), rather than monthly, which gets another discount.

The tax escrow accumulates throughout the year and the bank issues a check every December, which I use to pay the property tax bill in full. No tax discount for doing so, bummer.

Added: The bank pays interest on the money saved in excrow. It isn't much, but better than a kick in the teeth.

The payments for our taxes and insurance is through our mortgage. I am pretty sure most people I know, that's how theirs is done, but I have never outright asked either.

We pay all together. Most banks will require an escrow. They do not want to take a chance of losing the house to a tax sale. Then they get nothing. When my inlaw bought a building, the bank made the mistake and separated the payments so he paid the taxes himself. Then they tried to go back and tell him they needed an escrow. Too late, cpontract said no escrow. He preferred it.

Our mortgage is with Chase and even when we had a very large equity/ltv they would not let us cancel the escrow.

Our escrow account is a non-interest bearing account. Both our taxes and insurance are paid once a year, there is an early payment discount, as long as I send them the bill in time for them to take advantage of it.